Head of NHS blames Treasury for use of secret gagging orders

Sir David Nicholson, the head of the NHS, was on Wednesday night embroiled in
a row with George Osborne after he tried to blame the Treasury for the
widespread use of secret gagging orders by hospitals.

Sir David, who is retiring next year after criticism over his role in the Mid Staffs trust scandal, was accused of misleading Parliament after he told MPs he did not know how many of the orders had been signed.

In March, he claimed that he had only come across one of the orders, used for gagging whistle-blowers, but pledged to investigate the issue and write to NHS trusts.

However, the scale of their use only became clear when requests under Freedom of Information showed that at least 52 staff have been silenced using the orders since 2008, at a total cost of £2million.

Sir David was today accused of an "abnegation of responsibility" and "misleading Parliament" for failing to follow up on his pledge at a meeting of the Public Accounts Committee.

Stephen Barclay, the MP who obtained the figures, said: "You gave an undertaking... and you decided that you would not even have the courtesy to write back to the committee and tell us about what is self-evidently a potential conflict of interest within hospital trusts."

Sir David strongly denied accusations that he had been complicit in a "cover up" about the use of the gagging orders and said that he had "always supported people who have stood out against the system".

He said that the Department of Health had taken over responsibility for responding to MPs when he became head of NHS England, an arms-length body which runs services, in April 2013.

He then claimed that the Treasury had allowed NHS trusts to use the agreements without checks by the Government.

Unlike normal gagging orders, the settlements - known as judicial mediations - did not need the approval of the Department of Health or the Treasury, meaning the Government has no chance to block them.The loophole was closed earlier this year.

Sir David said: "We were operating under an assumption that judicial mediation was not required to go to the Treasury. It was confirmed in writing by the Treasury to us in 2011."

The Treasury admitted that it had written to the Department of Health to give the arrangements the green light, and said that its advice was"incorrect".

However, Marius Gallaher, a senior Treasury official, said that it was not the role of his Department to examine say whether the use of gagging clauses was justified.

He said: "The Treasury primarily looks at whether they secure value for money for the taxpayer. We don't normally look at the particulars of a gagging clause."

Sir David strongly defended his leadership. He said: "I have always supported people who have stood out against the system. It is a very, very important part of being a health professional and being a leader in the NHS to support people who speak out.

"To connect me with some kind of cover-up I think is entirely and utterly inappropriate and I completely refute it. There has been all sorts of stuff that has been said this morning that is completely untrue."

Mr Barclay said that gagging clauses had a "chilling effect" on staff speaking out about concerns relating to patient safety. Sir David agreed and said they were "not acceptable".

He said he had taken action to make sure that "everyone understands that you cannot gag NHS staff who want to speak out about patient safety and is using the public interest".

Committee chair Margaret Hodge said it was "gobsmacking" that the Treasury did not appear to understand its own rules.

Mr Barclay asked: "Does it not concern you, Sir David, that there's an inherent conflict of interest in a trust making these payments without referring to you as the accounting officer in your department or the Treasury?

"Is there a conflict of interest for the hospital trust that is making the payment against someone who has a dispute against the hospital trust? The complaint is against the body using taxpayers' money to settle the complaint."

Sir David insisted that each NHS Trust was an individual employer with responsibility for its own employment practices.

The Department of Health came under fire from MPs on the committee for failing to provide information on the numbers of payments to departing staff, as requested at an earlier hearing.

Mrs Hodge described the failure to hand over the data - or even to inform the PAC that it would not be forthcoming - as "impertinent".

Mr Barclay told Sir David: "You gave an undertaking... and you decided that you would decide the priorities of Parliament and not even have the courtesy to write back to the committee and tell us about what is self-evidently a potential conflict of interest within hospital trusts."

But senior DoH civil servant Charlie Massey said that NHS trusts across the country had been asked to deliver the figures, but that many had replied that, because of the upheaval of recent NHS reorganisations, any information they could find would be "partial,costly and inaccurate".